Pharmeasy to Acquire Thyrocare for $600 Million+

PharmEasy Acquires Majority Stake in Thyrocare for $613 Million

API Holdings, the parent company of the prominent healthcare startup PharmEasy, announced on Friday an agreement to obtain a 66.1% ownership stake in Thyrocare, a leading diagnostic lab chain. This acquisition is valued at approximately $613 million.

Notably, this represents the first instance globally of a unicorn startup acquiring a publicly listed company within India, the world’s second most populous country.

Transaction Details and Open Offer

The completion of this transaction is contingent upon securing necessary regulatory approvals and fulfilling other standard requirements. Docon Technologies, a wholly-owned subsidiary of API Holdings, will serve as the acquiring entity.

Furthermore, an open offer will be made to acquire an additional 26% stake in Thyrocare, with a value exceeding $241 million, as stated by the startup.

Potential Financing and Valuation

According to a filing (PDF) submitted to a local exchange, API Holdings is planning to secure further financing. This round may involve the sale of roughly 4.9% equity to Dr. A. Velumani, a key promoter of Thyrocare, for around $202 million.

Such a move would establish a valuation for the startup exceeding $4 billion.

Investment History and Current Standing

The six-year-old startup has successfully raised approximately $572 million in funding to date. Its most recent financing round, concluded in April, resulted in a valuation of $1.5 billion.

Prominent investors include Prosus Ventures, Temasek, Eight Roads Ventures, TPG, B Capital Group, and Bessemer Venture Partners.

Future Funding Plans

Siddharth Shah, CEO of API Holdings, revealed on Friday that the company is currently engaged in discussions to raise a $500 million financing round, aiming for a $4 billion valuation.

PharmEasy and Thyrocare: Market Leaders

PharmEasy holds the position of India’s largest online pharmacy and diagnostics brand, and is the sole healthcare unicorn startup in the nation.

The company operates a business-to-business pharmaceutical marketplace, connecting over 6,000 consultation clinics with 90,000 retail partners throughout the South Asian region.

Thyrocare's Diagnostic Capabilities

Thyrocare is recognized as India’s leading diagnostics solution provider based on test volume, processing over 110 million tests annually.

The 26-year-old organization maintains a network of more than 3,330 collection centers, serving over 2,000 towns across India.

Synergies and Future Outlook

The proposed acquisition is expected to allow PharmEasy to comprehensively support patients throughout their entire treatment process, according to Shah.

He also indicated that the startup does not currently have immediate plans to pursue an initial public offering (IPO).

Shah stated, “We will provide world-class customer experience in diagnostics, rivalling our pharmacy experience by leveraging technology, and building on top of the massive scale & truly pan-India presence of Thyrocare.”

“It is our aim to deliver all outpatient healthcare products & services to every Indian within 24 hours.”

Industry Consolidation and Competitive Landscape

Friday’s announcement signifies the latest development in a series of significant transactions within India’s rapidly consolidating healthcare sector.

Earlier in the month, Tata Digital, a subsidiary of the Tata Group, announced its acquisition of a majority stake in digital health startup 1mg, valuing the company at over $400 million.

Amazon also entered the Indian market last year with the launch of its online pharmacy.

Statements from Key Leaders

Dr. Velumani, Chairman and MD of Thyrocare, expressed his enthusiasm for the partnership, stating, “The unique reach and strength of Thyrocare in diagnostics blended with the young and dynamic team of PharmEasy will bring in better healthcare solutions for the common man nationwide.”